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’12 Billion Transactions:’ How Data Is Transforming the Music Business

We don’t yet have a foolproof algorithm capable of churning out nothing but hit songs. Even so, the music industry is embracing data wholeheartedly.

Speaking at Fortune‘s Most Powerful Women International Summit on Tuesday, Kobalt Music Group COO Avid Larizadeh Duggan gave attendees a taste of the data that underlies our favorite songs.

“There are 12 billion transactions in one hit song,” she said. And in order for the artist who created that song to get paid, someone has to track where the song is played—be it Spotify, Apple Music, on radio, or elsewhere—collect the money for each of those plays, and then distribute it to artists.

That’s the tricky data puzzle Kobalt, an independent rights management and publishing company, is trying to solve. At this point, the company, which competes with traditional record labels, is overseeing roughly 1.5 trillion transactions—from 10,000 income sources—per year, said Duggan.

In addition to the increase in volume of plays, the rise of streaming services has transformed the way artists think about the global market. “That’s really important right now,” she says. For instance, “80% of British artists on Spotify get the majority of their stream outside the U.K.” As a result, she says, Kobalt releases its artists globally “from Day 1.”

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